1. 2015 STATE OF THE LOCAL GOVERNMENT HEALTH INSURANCE PLAN (LGHIP) Presented by: William L. Ashmore, CPA Chief Executive Officer State Employees’ Insurance Board

2. Established in 1993 Section 36-29-15, Code of Alabama (Repealed 2014) Section 11-91A-1, et seq., Code of Alabama Local Government Health Insurance Plan State Employees’ Insurance Board (1993 to 2014) Local Government Health Insurance Board (2015 to Present) Governing Body Counties Municipalities Quasi-governmental groups Provides Health Insurance LGHIP BACKGROUND

3. EmployerEmployeeProviderBCBSLGHIB LGHIP HOW IT WORKS

4. LGHIP ENROLLMENT HISTORY

5. Benefit # Claims Provider Charges Network DiscountsNetwork Allowed Amount% % Hospital 120,345$386,553,270$296,028,60877%$90,524,66223% Physician 569,188$181,628,353$88,977,67449%$92,650,67951% Drugs 881,509$214,293,258$178,028,72783%$36,264,53117% Dental 52,447$13,208,043$3,804,66629%$9,403,37771% Total 1,623,489$795,682,924$566,839,67571%$228,843,24929% LGHIP 2014 NEGOTIATED PROVIDER SAVINGS

6. Benefit Network Allowed Member PaidPlan Paid Amount% % Hospital $90,524,662$6,172,2367%$84,352,42693% Physician $92,650,679$12,839,61814%$79,811,06086% Drugs $36,264,531$7,477,21321%$28,787,31879% Dental $9,403,377$3,268,88735%$6,134,49065% Total $228,843,249$29,757,95413%$199,085,29487% LGHIP 2014 COST SHARING

7. LGHIP

8. INFLATION TREND LGHIP VS. NATIONAL AVERAGE National Average Source: Mercer National Survey of Employer-Sponsored Health Plans 2014

9. LGHIP MEDICAL PREMIUM HISTORY Premium Rates as of January 1 National Av. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits. www.kff.org

10. LGHIP OVERALL CLAIMS TREND

11. DRUG TREND

12. 15% to 25% Forecast

13. DRUG TREND 15% to 25% Forecast

14. DRUG TREND 15% to 25% Forecast

15. LGHIB DECISIONS

17.  Premiums  Increase Premiums 7.8%  Benefits  Increase Physician Office Visit Copay to $40.  Increase Generic Drug Copay to $10.  Diabetic Brand Name Drugs Assignment Accepted  Teladoc - Physician Consultation ($0 Copay)  SelectQuote - Medicare Retiree Exchange  Draw from Reserve LGHIP 2016 CHANGES

18. Questions?